This week, press reports show Carnegie Mellon University (CMU) received a large, jury damage award ($1.17B) in a patent infringement lawsuit. This significant development is part of the on-going important policy dialog about university patenting, as noted in the attached press report link. Apparently, the patents arose out of the CMU Data Storage Systems Center (DSSC) (see US Patent Nos. 6,201,839 and 6,438,180; noise detection technology for computer hard drives). The damages might rise or fall with additional legal proceedings.
While the patents in the suit were not nanotechnology patents, the DSSC has a large nanotechnology aspect to its efforts. Also, university patenting is an important part of the nanotechnology innovation “ecosystem.”
The Office of Science and Technology Policy (OSTP) recently announced updates with the Materials Genonme Initiative (MGI). $25M in grants are noted, and the awardees include universities, national laboratories, and private sector companies (e.g., GM). Collaboration continues to be a strong theme.
Collaboration usually sounds good and makes sense in many contexts, particularly for purely basic research with long-term visions. However, collaborations can also generate complicated intellectual property and patent issues. For shorter term research with commercial applications as a goal, this can become a problem if not managed well. Hopefully, the MGI is considering this aspect of this new, exciting commercialization program. The MGI is now about 1 1/2 years old. The MGI has many close links to nanotechnology and the NNI (National Nanotechnology Initiative) including a program for predicting the properties of nanomaterials. Hopefully, the MGI is well and efficiently integrated with the NNI.
Also, hopefully 2013 budget issues do not slow down the MGI. Stay tuned.
Another “march-in petition” has been filed recently as part of the on-going implementation of the Bayh-Dole system. The attached web page provides access to the petition, cover letter, and broader context. Now, several groups are seeking march-in against a series of AIDS/HIV related drug patents. Funding for the underlying inventions was provided by the NIH.
No march-in petition has ever been granted during the 32 years of the Bayh-Dole system. If one were granted, the grant would likely have a major impact on the Bayh-Dole system, extending beyond the particular case at hand. Best I can tell, the last march-in petition was filed about two years ago, but the petition failed (see our prior blog entry).
Review of the patent literature confirms that many nanotechnology and clean tech inventions arise from federal funding and invoke the Bayh-Dole system. Funding comes from the NNI and Department of Energy, for example. However, it is not unusual to find investors and executives in these areas to be relatively unaware of the Bayh-Dole system and its legal implications.
I will note briefly that I found the petition dialog interesting for attempting to legally separate out what appears to be (1) a primary use of the patented invention, from (2) secondary uses of the patented invention, or what is called a “dependent technology.”
We confirm that a nanotechnology patent filing explosion continues at a record pace in 2012 as we enter the final trimester of the year. On July 8, 2012, we reported that the USPTO was on pace to publish a record number of class 977 nanotechnology patent applications (over 4,000). This was also noted in past postings and reflects a solid trend. We checked again today and confirm that the current projection to end of the year remains at over 4,000 (4,043). The broad variety of technology in the filings is startling and in places unconventional. For example, US Patent Publication 2012/0221268 (the last application to publish) relates to quantum computing and lists Microsoft as assignee. Hydraulic fracturing is increasingly referred to in this body of patent literature as there are 16 such publications this year which is double the number compared to the prior three years combined (e.g., Halliburton’s US Patent Publication 2012/0220504).
Hopefully, as many of these patent filings as possible will serve useful commercial purposes and facilitate investment from the private sector as well as from government. The licensing of these patent filings can be analyzed for use in policy formulation and business development. Certainly, the on-going miniaturization of electronic devices – a hot patent topic these days with the Apple v. Samsung developments - will require more developments in nanotechnology including, for example, better batteries, power management, semiconductors, and displays. Clearly, many of the patent filings find applications related to energy, electronics, and bio nanotechnology.
In addition, hopefully the quality of filings remains solid despite the pressures to file applications. Finally, (hopefully!), patent reform will function to improve the patent system and encourage investment, particularly as it applies to nanotechnology inventions.
The NNI is now presenting to the public a new signature initiative devoted to sensors. Two thrusts are identified: (1) use of nanotechnology in building sensors, and (2) develop better sensing methods for detecting nanomaterials. An associated white paper provides more details.
This is the fifth signature initiative from the NNI. According to the announcement, past sensor work has been held back due to problems with lack of reliability, reproducibility, and robustness. Sensors apply to a broad spectrum of industries, including energy, health, and defense. Certainly, after 9-11, sensors were identified as a key technology associated with homeland defense. Hence, federal thrusts in this sector would seem to make sense.
Some references to commercialization are present. For example, the announcement refers to US Patent No. 7,889,954 as an example of the type of technology upon which they want to build (from the Sailor group at University of San Diego). However, as if often the case with the federal government announcements, the commercialization issues at stake lack detail. For example, no patent studies are noted as part of what is important commercially in work to date. No analysis of the Bayh-Dole system in this sector or of the history of licensing or venture funding for sensor technology is noted. Brief reference to nanomanufacturing is noted (nanomanufacturing is another NNI signature initiative).
The ’954 patent, according to PTO records, is assigned to University of California and the federal government, jointly. Federal money apparently was used to develop the invention. The patent abstract for this patent is below:
An embodiment of the invention is a remote sensor that has an optical fiber terminating in a tip. A thin film porous particle having a characteristic optical response that changes in the presence of an analyte is optically coupled and physically attached to the tip of the optical fiber. The optical response of the particle changes in the presence of analyte, and the particle also serves to concentrate analyte. The thin film porous particle can be functionalized toward sensitivity for a predetermined analyte or analytes. A method of remote sensing exposes the remote sensor to an environment to be monitored for analyte. The thin film porous particle is probed with a beam of light. Reflected light is monitored through the optical fiber for a shift in frequency or intensity.
We have been reviewing the President’s budget proposals announced yesterday, February 13, 2012 (fiscal year 2013 President’s Budget). In particular, we are looking at impact on nanotech and cleantech. Some highlights:
First, the NNI was given a 4.1% increase (NNI is National Nanotechnology Initiative). The total would rise to $1.8B.
Second, within the NNI heavy cuts are slated for defense, including DOD (down 20%) and Homeland Security (down 14%).
Third, within the NNI, heavy increases are proposed for Energy (up 40%) and the EPA (up 12%).
Interesting that in the webinar provided explaining the rationale, a research program can be cut for failure for lack of good future prospects. Alternatively, however, a research program can be cut if it is commercially successful and transitioning to the private sector. Hence, the input from government is for those programs in the middle.
The webinar also featured the administration continues to assert that the federal government had a major impact over the past thirty years on shale gas developments.
Foley’s annual Cleantech Energy Patent Landscape Report provides an analysis of the top clean energy technologies patented in the United States to aid industry executives, start-ups, individual inventors, and investors in identifying trends and market opportunities in this continually changing landscape.
View the executive summary:
2011 Cleantech Energy Patent Landscape Report Executive Summary
The Report highlights key findings from a review of more than 1,100 granted U.S. patents specific to clean energy production, efficiency, and conservation technologies within eleven focal categories: solar, wind, hydro, geothermal, biomass, nuclear, hybrid vehicles, fuel cells for vehicles, utility metering, smart grid technologies, and CO2 storage or sequestration. To help participants in this space discern realistic opportunities for sustaining competitive edge and revenue generation, the analysis offers insight on:
- Regional cleantech activity
- Year-to-year trend perspective
- Specific technologies for which patent protection is being granted and who is obtaining those patents
- Focal points for venture capital investments
- Areas of patentable white space
- Potential licensing availability for corporate entities
For more information or a copy of the full annual report, please contact your local Foley attorney or contact me directly at firstname.lastname@example.org.
I saw two items this week of note, illustrating a contrast in webpage activity for those that follow cleantech and nanotech:
- Karina Edmonds is the DOE Technology Transfer Coordinator and blogs about the role of technology transfer from government-sponsored research. One of my favorite technologies is GPS (for example, few things are better than getting into a cab at a new city and pulling out from your pocket a GPS on a smartphone – and with a few easy key strokes instantly have visually appealing maps to the hotel which show the taxi speeding along and closing the gap to the hotel in a cost efficient manner hopefully). Edmonds leads with GPS technology, which flowed from government sponsored research, as an example of the potential. This is but one example of the active and informative nature of the www.energy.gov webpage, which I appreciate.
- After a two month delay, www.nano.gov finally posted something new. In contrast to my impression for www.energy.gov, I have been disappointed that this web site, focusing on the NNI, has not been more active in recent months. The posting related to SRC-NSF university funding of nanoelectronics research, trying to find the next “switch.” I can only hope that this webpage will be activated and a priority in coming months.
The DOE is staying active this summer (despite Washington budget quagmires) and now provides us with an upgraded web page. Several highlights today include:
1) Major loan guarantee for solar ($967 M) !
2) Updates on the SunShot solar program: $50 M is provided.
3) Updates on the "America’s Next Top Energy Innovator" challenge: Ames Laboratory and Iowa Powder Atomization Technologies (IPAT) are the subject of the new reduced fee, streamlined licensing program.
In the DOE view, nanotechnology is expected to make significant impact on areas such as solar, batteries, and water purification.
The above is just a sample.
The Department of Energy has announced a new initiative, “America’s Top Energy Innovator”. The gist is an applicant can get a “price break” and less “red tape” in licensing patents from the federal government which are not currently licensed, focusing on start-ups. The program begins May 2, 2011 and apparently will have a cut-off date of December 15, 2011
In particular, the goal seems to be to make it easier for start-up companies to license. Critical issues over the value and costs of exclusive versus non-exclusive licensing were not noted.
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The Department of Energy has announced updated information about its new, expanded Web portal devoted to commercializing technology related to energy. Formally, the portal is entitled Energy Innovation Portal, Linking Energy Technologies with Market Opportunities.
One major emphasis is patent licensing (or more generally, technology transfer, and one can search a database of patent literature and technology marketing summaries for licensing opportunities. Success stories are noted in the portal, along with upcoming events such as the ARPA-E Energy Innovation Summit, to be held February 28 – March 2 in Washington DC. In briefly looking through the portal, I easily found several interesting video presentations (e.g., OLED lighting and thin film solar). Apparently, there are 312 “Technology Marketing Summaries,” 11,677 patents, and 3,523 patent applications to search. With practice, this searching will become easier. When I searched “nanotechnology,” I found only154 patent documents and only three marketing summaries. When I shortened to “nano,” the results expanded considerably to 860 patent documents and 13 marketing summaries.
Emphasis is also on DOE “partners” and laboratories as opposed to DOE funding of research at universities and companies.
Hopefully, the site will be useful to the public and business and expanded in response to user experience. Success stories related to “exits”- e.g., IPOs and mega dollar acquisitions – are of particular interest.
A new report just issued which, in 129 pages, provides the latest analysis and commentary on university patenting and technology transfer under the Bayh-Dole Act.
The report is generally positive about the Bayh-Dole Act, now about 30 years old, and confirms that most do not want to return to the pre-1980 era. The report did not get into much specificity with respect to nanotechnology or cleantech, but the report is very important to these fields. The NNI ten year anniversary is here, and NNI strategy for its second decade is crucial.
Ironically, Allen J. Bard (University of Texas) also recently provided a guest editorial to C&EN (October 11, 2010) in which he expressed concern that young people may not want to become university professors if the university pushes them to generate IP and funding through IP. Per Bard, money has become too important at the university, and use of patents to generate funding is part of the problem (and a growing part).
The report, prepared by the National Research Council, can be downloaded at: http://nap.edu/catalog.php?record_id=13001
A potential "bombshell" is in the making which could ultimately impact nanotech and cleantech:
On August 2, 2010, several persons with Fabry disease petitioned the federal government (NIH) to effectively break an exclusive license held by Genzyme for the drug Fabrazyme®. To date, the government has only reviewed three of these march-in petitions and, to date, has not granted any of them.
However, this time, lives are at stake and threatened persons are petitioning their government.
This time, the administration in power may review the petition with greater sympathy to the petitioners. President Bush’s administration reviewed the last march-in petitions. What would Obama do? (Ok, what will the Obama administration do?)
If this petition is granted, important legal and policy implications will flow that influence all technical sectors like nanotech and cleantech which depend on federally funded inventions. At least ten percent of nanotech patents stem from federal funding.
Bayh-Dole "junkies" will follow these developments closely. Bayh-Dole is the legal system which controls the licensing of federally funded inventions to the private sector, and provides the legal context for the potential march-in.
Possible outcomes range from, for example, (i) some sort of settlement approved by the government, (ii) a narrow "breaking of the patent" which would not be too damaging to Genzyme and would be tailored to this fact pattern, (iii) a broad-based "breaking" of the patent with far-reaching implications to other situations, including nanotech and cleantech, or (iv) petition denied.
How should the NIH rule?
A related NPR story.
To read the petition to the NIH directly, read below:
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Foley’s Rewards and Risks of “Green” Web Conference Series explores ways for executives in green technology industries to identify and leverage market opportunities while navigating legal and regulatory uncertainties.
Your innovation and IP assets drive your business growth and provide a critical competitive edge. When extracting monetary value from your IP assets — such as licensing efforts — what’s not readily apparent can distract you from realizing profitability and even trap you into complicated disputes. In this series installment, How to Make Your IP Assets Work Double-Duty While Minimizing the Risks of Disputes, we will share first-hand experience from leading industry innovators to address methods for protecting the value of your technology investments via a well-managed licensing program and implementing safeguards from the hindrance of potential litigation disputes.
This discussion will include:
- R&D: Creating royalty revenue and leveraging IP assets
- License grants: Enforcement rights versus ramifications
- Patent infringers: Safeguarding and managing their pursuit
- Potential litigations: Vital financial and business considerations
- Licensing parties: Licensing large patent portfolios versus a broad range of technologies
Featured Guest Speaker:
Martin Hanssmann, President of AltaStream Energy Solution Inc.
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The University of Florida has started construction on the “Florida Innovation Hub.” This building will house a number of growing high-tech businesses in Florida. It also has drawn a number of companies that could provide services to these start-up companies, such as venture capitalists, lawyers and other tech inventors. The Hub will likely incubate 15 to 20 University of Florida spin-off companies at a time, in addition to a tech licensing group and six to eight service providers.
This follows Florida’s trend in attracting high tech businesses and start-up companies to Gainesville. Gainesville’s high concentration of intellectual talent, low cost of living, climate and quality of life all translate to an ideal place for transforming great ideas into tangible and functional technology.
The 2010 Cleantech Energy Patent Landscape Report Executive Summary recently released by Foley & Lardner LLP highlights key findings from a review of nearly 825 granted U.S. patents specific to clean energy production, efficiency, and conservation technologies within 11 focal categories:
- Hybrid vehicles
- Fuel cells for vehicles
- Utility metering
- Smart grid technologies
- CO2 storage or sequestration
To aid industry executives, start-ups, individual inventors, and investors in identifying and leveraging market opportunities in this continually changing landscape, this annual analysis offers insight on regional cleantech activity, the specific technologies for which patent protection is being granted and who is obtaining these patents, focal points for venture capital investments, areas of patentable white space, and potential licensing availability for corporate entities.
For a copy of our full Cleantech Energy Patent Landscape Report, please contact John Lazarus at email@example.com.
An important theme in nanotechnology is state government pushing for economic development through funding of nanotechnology high-tech start-up companies and university technology transfer. Adding to this push, a recent report suggests that state governments should increasingly fund “home grown” high-tech start-ups rather than provide money to established companies. Home grown, turns out, provides better return for the state. The report, titled "Good Jobs, Strong Industries, a Better Pennsylvania: Towards a 21st Century State Economic Development Policy," was prepared by the Keystone Research Center and focused on developing jobs in Pennsylvania (see, for example, March 21, 2010 edition of the Pittsburgh Post-Gazette, D1, summarizing the report, case studies, and its implications). The reports’ implications, however, are national. In addition, the Keystone report also advocated for more transparency in how the state funding money is used and the results of the funding.
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The "reasonable royalty," that mythical and highly elusive number that some expert witnesses have built careers on, may at long last condense out of the ether. As Law360 has reported, Intellectual Property Exchange International ("IPXI") may soon become the first financial exchange for selling patent licensing rights as units (similar to stocks). As a result, publicly available financial information on the price of the license rights units could, for example, provide a frame of reference for the market value of such licenses.
For universities negotiating with start-ups, or start-ups negotiating with OEMs to commercialize intellectual property, the exchange may provide a valuable alternative to time-consuming and sometimes expensive development of complex license agreements. This may especially be true very early on with license negotiations for nanotechnology innovations.
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A technology transfer debate may be brewing which could impact nanotechnology heavily. First, the Kauffman Foundation set forth the idea that U.S. innovation could be improved by allowing faculty to choose their own licensing agents and not be limited by the university technology licensing office. Then, the Harvard Business Review recently elected this idea as a top 10 idea for innovation in 2010. Now, the Association of University Technology Manager (AUTM) plans to rebut the Kauffman Foundation idea:
“Kauffman alleges that technology licensing offices are “underperforming” and are a “major impediment.” AUTM does not believe this is the case and wants its membership to know that it is taking a proactive stance by preparing a response to the article. Stay tuned for details as they emerge.”
Nanotechnology relies heavily on federal funding, technology transfer, and university inventions so the outcome of this debate is vital. We see in practice examples of complicated, successful, and/or difficult relationships among the complicated triangle of professors, university technology transfer offices, and private sector companies seeking to license from the university. An initial perspective: it might be interesting to see how the system would work in some “test case situations” where a university voluntarily allows its professors to work with other licensing agents.
We will continue to follow this issue as it develops.